Russia’s Crude Exports Fall Back As Flows From The Baltic Shrink
Shipments from Primorsk and Ust-Luga were down by one-fifth from the previous week
(Bloomberg) -- Russia’s seaborne crude exports in the first week of April fell back from the year-to-date high they reached at the end of last month, as shipments from the country’s Baltic ports sagged.
Last week’s drop was driven by fewer cargoes from Primorsk and Ust-Luga, where volumes declined by about 20%, tanker-tracking data compiled by Bloomberg show. The pullback followed a surge in flows from those ports in the final two weeks of March amid Ukrainian drone strikes on Russian refineries, which may have diverted crude into exports rather than domestic processing.
Moscow’s weekly earnings shrank. The gross value of the country’s crude exports fell to $1.82 billion in the seven days to April 7 from a revised $1.95 billion in the period to March 31. Four-week average income was also down, shrinking to $1.75 billion a week.
Separately, four-week average shipments to Asia climbed to their highest since July 2023 in the 28 days to April 7.
The increase in flows to Asian destinations — predominantly China and India — came as Treasury officials said that the US isn’t trying to stop India importing Russian oil after it tightened sanctions on companies and ships hauling Moscow’s barrels. Washington wants to keep energy flowing to prevent any supply shortages stemming from the war in Ukraine, while reducing the Kremlin’s revenues.
Most of a backlog of Russia’s Sokol crude that built up after being turned away by Indian refiners has now been discharged. About 9.1 million barrels, half of the total, have been delivered to refineries in China. Another 7 million barrels are finding their way back to India. One cargo was delivered to Pakistan and a second is waiting to be offloaded there.
That leaves just 1.4 million barrels still to show a destination. All of the Sokol cargoes loaded since mid-February headed directly to China.
Flows by Destination
Russia’s seaborne crude flows in the week to April 7 fell by 450,000 barrels a day to 3.39 million, down from the previous week’s year-to-date high. The less volatile four-week average also dropped, down by about 80,000 barrels a day to 3.42 million.
Weekly shipments were about 200,000 barrels a day lower than the average seen in May and June, or about 75,000 barrels a day less than Russia’s April target, which is part of the OPEC+ alliance’s broader effort to curb supplies and support prices. The four-week average was about 50,000 barrels a day below the target.
Russia said it would cut crude exports during April by 121,000 barrels a day from their average May-June level as part of the wider OPEC+ initiative, as Moscow shifts more of the burden onto production targets, which are preferred by other members of the group. Seaborne shipments in the first three months of the year exceeded Russia’s target level by just 16,000 barrels a day.
All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Those are shipments made by KazTransoil JSC that transit Russia for export through the Black Sea port of Novorossiysk and the Baltic’s Ust-Luga and are not subject to European Union sanctions or a price cap.
The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since Russia’s invasion of Ukraine, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies.
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Asia
Observed shipments to Russia’s Asian customers, including those showing no final destination, rose to 3.09 million barrels a day in the four weeks to April 7, up from a revised 3.07 million in the previous four-week period to the highest since July 2023.
About 1.36 million barrels a day of crude was loaded onto tankers heading to China. The Asian nation’s seaborne imports are boosted by about 800,000 barrels a day of crude delivered from Russia by pipeline, either directly, or via Kazakhstan.
Flows on ships signaling destinations in India averaged about 1.22 million barrels a day.
Both the Chinese and Indian figures will rise as the discharge ports become clear for vessels that are not currently showing final destinations.
The equivalent of about 390,000 barrels a day was on vessels signaling Port Said or Suez in Egypt. Those voyages typically end at ports in India or China and show up in the chart below as “Unknown Asia” until a final destination becomes apparent. This figure includes stranded Sokol crude cargoes that are still waiting to discharge after failing to find homes in India since mid-December.
The “Other Unknown” volumes, running at about 80,000 barrels a day in the four weeks to March 31, are those on tankers showing no clear destination. Most of those cargoes originate from Russia’s western ports and go on to transit the Suez Canal, but some could end up in Turkey. Others could be moved from one vessel to another, with most such transfers now taking place in the Mediterranean, off the coast of Greece, or more recently off Sohar in Oman.
Europe and Turkey
Russia’s seaborne crude exports to European countries have ceased.
With flows to Bulgaria halted at the end of last year, Turkey is now the only short-haul market for shipments from Russia’s western ports.
Exports to Turkey slipped to about 323,000 barrels a day in the four weeks to April 7 from a revised 400,000 barrels a day in the period to March 31.
Vessel-tracking data are cross-checked against port agent reports as well as flows and ship movements reported by other information providers including Kpler and Vortexa Ltd.
Export Value
Following the abolition of export duty on Russian crude, we have begun to track the gross value of seaborne crude exports, using Argus Media price data and our own tanker tracking.
The gross value of Russia’s crude exports fell to $1.82 billion in the seven days to April 7 from a revised $1.95 billion in the period to March 31. Four-week average income was also down slightly, dropping by about $8 million to $1.75 billion a week. The four-week average is well off its peak of $2.17 billion a week, reached in the period to June 19, 2022. The highest it reached last year was $2 billion a week in the period to Oct. 22.
During the first four weeks after the Group of Seven nations’ price cap on Russian crude exports came into effect in early December 2022, the value of seaborne flows fell to a low of $930 million a week, but soon recovered.
The chart above shows a gross value of Russia’s seaborne oil exports on a weekly and four-week average basis. The value is calculated by multiplying the average weekly crude price from Argus Media Group by the weekly export flow from each port. For shipments from the Baltic and Arctic ports we use the Urals FOB Primorsk dated, London close, midpoint price. For shipments from the Black Sea we use the Urals Med Aframax FOB Novorossiysk dated, London close, midpoint price. For Pacific shipments we use the ESPO blend FOB Kozmino prompt, Singapore close, midpoint price.
Export duty was abolished at the end of 2023 as part of Russia’s long-running tax reform plans.
Ships Leaving Russian Ports
The following table shows the number of ships leaving each export terminal.
A total of 31 tankers loaded 23.7 million barrels of Russian crude in the week to April 7, vessel-tracking data and port agent reports show. That was down by about 3.2 million barrels from the revised figure for the previous week.
All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. Two cargoes of KEBCO were loaded at Ust-Luga during the week.
NOTES
Note: This story forms part of a weekly series tracking shipments of crude from Russian export terminals and the gross value of those flows. Weeks run from Monday to Sunday. The next update will be on Tuesday, April 16.
Note: All figures exclude cargoes owned by Kazakhstan’s KazTransOil JSC, which transit Russia and are shipped from Novorossiysk and Ust-Luga as KEBCO grade crude.
If you are reading this story on the Bloomberg terminal, click here for a link to a PDF file of four-week average flows from Russia to key destinations.
--With assistance from Sherry Su.
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